The latest jobs report from the Bureau of Labor Statistics contains good news for healthcare. The industry is continuing to hire, to the tune of over 43,000 new jobs last month. But a report on the effectiveness of those hires should have hospitals and health systems thinking about employee retention.
As more jobs become available, hospital employees are seeing more opportunities to jump ship.
Hospitals are seeing that the quality of their hires has weakened and voluntary turnover rates are increasing according to the PricewaterhouseCoopers Saratoga 2012/2013 US Human Capital Effectiveness Report, released this month.
Using data collected in 2011 from over 50 hospitals from all the regions of the United States, the hospital sector report represents over a million hospital employees and more than 175,000 bedside nurses.
With nurses representing such a huge part of the delivery of that care, the upward trends PwC Saratoga reports in turnover of nurses and hospital employees should concern hospitals that are trying to improve the quality of their patient care and improve labor efficiency.
First-year turnover is not only higher in the hospital sector (28.3%) than for the rest of U.S. industries (21.5%), but it is increasing. Bedside nurses were highlighted in the report—22.2% of first year bedside nurses leave after their first year of working in a hospital.
And it is costly. According to the PwC Saratoga report, compared with the past two years, hospitals are losing high performers and employees in key/pivotal roles at increasing rates. The cost of turnover, the report calculates, is 1.5 times the projected base salary for departing exempt employees and .5 times the projected base salary for nonexempt employees.
It's important from an HR perspective that hospitals invest in maintaining and managing a good workforce, says Shebani Patel, a Director within PwC's Saratoga Group, who oversaw the collection of data for this hospital sector report. "They do that by having strong quality of hire," she says. Quality of hire, as measured by PwC's report, is the rate of first year turnover. Measuring this rate is a good indicator of an organization's effectiveness in hiring, orientation, and assimilation strategies, says the PwC report.
Melissa Knybel, RN, BSN and Director of Operations at Randstad Healthcare agrees. "That one year of experience is a very key indicator, because once you have that one year of hospital-based experience under your belt, you literally are employable by so many other employers," she says.
The economy, while it was weaker over the past few years, contributed to steadier retention levels. As it has strengthened, and job growth has recovered, experts are crediting part of higher turnover rates to an increase in the confidence of the healthcare workforce.
"People are wondering, 'Am I at the right place?'" says Patel. "There's nothing better than a little change in the economy to give people that boost, that feeling that, 'OK, I can consider what other opportunities are around.'"
The first year of service turnover rate for nurses (22.2%) is not surprising because of the standard experience of a first-year nurse, says Knybel. "They're at the bottom of the totem pole, usually working the night shift, or they don't have the number of hours they were hoping for."
To make it more challenging, they're usually not working in the unit they would ideally want to be placed in. This is where HR can really step in and make the difference, she says.
"What I think the greatest opportunity for hospitals and hospital managers to improve upon is the engagement factor of the employees," says Knybel. While Knybel says the orientation and onboarding processes are critical to getting the nurse engaged with the values and culture of the organization, after that is when you risk losing the new employee.
"Suddenly after all that love and attention, everything is dropped and you're off on your own, there's no more orientation, you're on the night shift, and it's like, 'Go. Do it,'" says Knybel. "There's no follow up."
Nurses often don't see much of their managers. If they're working night shifts, or simply have opposite hours than the nurse managers, when is that engagement supposed to take place? Even then, nurse managers can often be excellent clinicians, but perhaps they are lacking the management skills to handle some of the personnel issues that might arise. HR can fill in this gap.
According to Patel at PwC Saratoga, the role of HR in healthcare is shifting from "a transactional provider" who handles hiring, paying, and exiting the staff to a role that should permeate more nuanced areas of the employees' experience at the hospital.
A glimpse into a successful level of engagement is where a high volume of hires are young and in their first year of professional work is an academic medical center.
At The Ohio State University Wexner Medical Center, where many of the new nurses are recent graduates, the hospital's HR department has established a training program that engages new employees into the system and has kept their turnover rate at an average of 10% over the past five years, according to Karen Bryer, Director of Employment.
HR is involved, she says, in assigning new nurses precepts and mentors, and in coordinating orientation classes before new hires start clinical work. There is also an emphasis on understanding the goals and aspirations of new nurses, she says.
The HR department coordinates performance management classes for managers, so they can not only learn how to have impactful conversations with employees about their careers, but how to be engaged in their employees' goals as well.
"This is how you keep superstars around," says Bryer.
Bryer credits OSU Wexner Medical Center's success with retention to a lot of shared governance in their nursing department with teams and committees. "You need to be able to offer your employees the opportunity of a voice at a table," she says. The hospital has achieved Magnet recognition from the American Nurses' Credentialing Center of the American Nurses Association.
Knybel agrees and gives credit to hospitals with Magnet recognition for their successful nurse retention levels. "If the hospital wants to be successful at keeping employees engaged, but also improve a key metric of improving the quality and value of the reimbursements you're getting, why not talk to the stakeholders who are providing the patient care?"
"Be able to listen," says Knybel. "It's important to actually listen to the feedback and make changes."
The industry is recognizing this need. According to PwC Saratoga, hospitals have increased their investment in HR in 2011 from $701 per employee to $806 per employee in 2011, although this figure still stands far below the $1,610 PwC noted that the rest of the industries spend.
Chelsea Rice is an associate editor for HealthLeaders Media.
